2012
Immune Deficiency Foundation
Health Insurance Toolkit
for Patients with Primary Immunodeficiency Diseases and Their Families
September 2012
1
IDF Health Insurance Toolkit
for Patients with Primary Immunodeficiency Diseases and Their Families
Having the tools you need to select the right healthcare plan for you and your family is very important.
As the U.S. healthcare system undergoes changes, one important change is that individuals and
small businesses will be able to shop for and purchase health insurance through a state insurance
exchange. Those affected by primary immunodeficiency diseases (PIDD), as well as other rare
disorders, need to make educated decisions on their coverage options. The Immune Deficiency
Foundation’s (IDF) Health Insurance Toolkit provides you with the information and resources to make
the best possible choice in selecting a private health insurance plan.
This toolkit reflects rules and protections already in place under the Affordable Care Act, including no
cost-sharing for certain preventive services and a ban on lifetime limits on benefits. Changes that take
effect in 2014 will be reflected in the next, updated edition of the Health Insurance Toolkit and will
include a ban on annual limits on benefits, the essential health benefits and standardized levels of
coverage.
It is essential to understand your family’s current utilization of healthcare and learn to evaluate and
compare medical insurance plans available in your area. The selection of an appropriate insurance
plan can affect the health and finances of both the patient with primary immunodeficiency disease and
family members. IDF is proud to offer this toolkit to provide you with information, facts, resources and
worksheets to help you choose the best possible options for you and your family.
About the Immune Deficiency Foundation
The Immune Deficiency Foundation (IDF) is the national non-profit patient organization dedicated to
improving the diagnosis, treatment and quality of life of persons with primary immunodeficiency
diseases through advocacy, education and research. IDF was founded in 1980 by parents of children
with primary immunodeficiencies and their physicians. At that time, there were few treatments for
primary immunodeficiency diseases, almost no educational materials for patients, no public advocacy
initiatives, and little research being done. In the past thirty years, IDF has pursued an aggressive
agenda to remediate these problems and has made tremendous strides in the following areas:
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Helping the patient and professional communities gain a broader understanding of primary
immunodeficiency diseases through comprehensive education and outreach efforts;
Promoting, participating in, funding and supporting research that has helped characterize
primary immunodeficiency diseases and given healthcare providers substantially improved
treatment options for the care of patients with primary immunodeficiency diseases;
Addressing patient needs through public policy programs on local, national and international
levels by focusing on issues such as insurance reimbursement, patient confidentiality, SCID
newborn screening, preventing genetic discrimination, ensuring the safety and availability of
immunoglobulin therapy, and maintaining and enhancing patient access to a full range of
treatment options;
Establishing supportive networks of patients and professionals to ensure that the needs of
patients with primary immunodeficiency diseases are recognized and addressed.
In the United States, approximately 250,000 people are diagnosed with a primary immunodeficiency
disease, and many more go undetected. Representing a group of more than 150 different rare
disorders, primary immunodeficiencies are often difficult to diagnose. While not contagious, these
diseases are caused by hereditary or genetic defects, in which part of the body’s immune system is
2
missing or functions improperly. These individuals live throughout the country and experience a
number of problems which have been documented by IDF. These patient problems include:
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Difficulty in finding specialized healthcare by immunologists or care providers
knowledgeable about immunodeficiency
An inordinate delay in reaching proper diagnoses
Problems with availability of appropriate treatment
Difficulties financing healthcare and treatment
Finding instructional materials about the specific diseases
Educating the community and those with whom they come in contact about their disease
and particular needs
Lack of peer support and connection to others with whom they can share experiences
The goal of IDF is to address these issues and help affected individuals to overcome these
difficulties, thereby enabling them to live healthy and productive lives.
For more information, contact IDF: 800.296.4433 or www.primaryimmune.org.
3
Table of Contents
Private Health Insurance Toolkit………………………………………………………………………….5
Provides a general overview of the toolkit
Getting Started………………………….……………………………………………………………………6
Identifies what materials you need to complete the Health Plan Cost Comparison Worksheet
Personal Health Experience Status Sheet………………………………………………………………7
Allows you to summarize your healthcare utilization in order to understand your needs in
choosing a new healthcare plan
Health Plan Cost Comparison Worksheet …………………………..………….………………………8
Helps you record and compare healthcare plans’ cost and benefits
FACT SHEETS
Summary of Benefits and Coverage (SBC) and Uniform Glossary……………………………….12
Standard forms that must be used by all health insurance companies to summarize benefits
and coverage.
Prior Authorizations…………………………………………………………………………………….....13
Information about prior authorizations required for certain procedures and medications
Appeals & Grievances………………………………………………...…………………………………..14
If you are denied coverage of healthcare claims, this section will help you understand the
appeals process.
Medicare.……………………………………………………………………………………………………16
Summary of how Medicare eligibility affects those with private insurance coverage
Acronyms and Glossary………..……………………………………..………………………………….20
This publication will be updated periodically. Please visit the Immune Deficiency Foundation website
for updated versions at www.primaryimmune.org.
4
Private Health Insurance Toolkit
Whether it is an individual or family policy offered through your employer (a group health plan) or one
you acquired as an individual, there are many things to consider when reviewing your options. These
considerations usually fall under one of two categories: cost or benefits. Typically most people look at
the cost of the plan when making a decision – our goal is to help you evaluate the benefits you receive
in relation to the cost of the plan you select. Questions to ask may include:
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What is the monthly/annual premium for the plan?
In a given year, what might be the sum total of my out-of-pocket costs, including medical and
prescription co-pays, deductibles and/or co-insurance?
Will the policy cover all the services I need?
Are my physicians covered or are they out-of-network?
Are there annual limits? If so, is it a maximum annual benefit limit based on dollars or on number of
visits or both? For example, home healthcare coverage is usually limited to a certain number of
nursing visits per year.
Are out-of-network benefits available? If so, what percentage of cost will be my responsibility if I
receive out-of-network benefits?
Am I covered if I get sick while out of state? Out of the country?
For those affected by primary immunodeficiency disease, there are often additional, more specific,
questions you must ask that relate to what benefits are covered and how, such as:
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Is immunoglobulin (Ig) therapy covered? If so, is it a part of major medical or a pharmacy benefit?
Do I have a choice of site of care (hospital, home infusion, physician’s office)?
Do I have a choice of administration of therapy, i.e. subcutaneous (SCIG) or intravenous (IVIG)?
What is my out-of-pocket cost for my Ig therapy?
Are supplies and nursing services covered?
Do I need a referral to see a specialist?
What services require prior authorization?
Is Ig therapy subject to a restrictive formulary?
Will I be required to switch from my current Ig product to another product?
Does the plan provide a case manager to assist me with navigating my benefits?
Answers for many of the questions above, both relative to cost and benefits, can be found by reviewing
your plan’s summary of benefits, drug formulary list and provider network directory. While this is often
viewed as a tedious process, it is one of the most important steps you can take to insure that a plan
meets your needs.
It is important to remember that …Once you choose a plan, you cannot change
until the next open enrollment period.
In many instances, you may find that you have the option to choose between multiple plan types and
designs: HMO, PPO, POS, EPO, etc. The “Health Plan Cost Comparison Worksheet” (page 8) is a tool
designed to assist you in performing a side-by-side comparison of your plan options by helping to identify
coverage benefits and out-of-pocket costs associated with each. The Worksheet can be used in two ways:
as a tool to make general comparisons between health plans or as a customized tool designed to highlight
the costs and benefits specific to your individual needs.
5
Getting Started
Step 1
Prepare the “Personal Health Experience” status sheet (page 7).
Step 2
Collect from your Human Resources representative, case manager or navigator the following documents
for each health plan being presented. Alternatively, if you are purchasing individual insurance, ask for the
plan documents from the insurance company or insurance broker. (Please note that often you will be
provided with a link to this information on the carrier’s website.)
1. Benefit Summary - A benefit summary gives an overview of the benefits provided by health
insurance plans and does not include all requirements or qualifications of each benefit. It shows
current rates for all benefit programs including health, dental and life insurance. It is only a
document given for informational purposes and does not constitute an agreement.
2. Drug Formulary - Health insurance companies maintain a formulary, which is a list of prescription
drugs, both generic and brand name that are available through your health plan. A formulary
classifies drugs into different cost tiers—categories that define the plan member’s co-payment or
co-insurance levels. Prescription drug plans financially reward patients for using generic and
lower-tier formulary drugs by requiring the patient to pay progressively higher co-payments or coinsurance for drugs on higher tiers.
3. Provider Network Booklet - A provider network is a group of providers (such as physicians,
pharmacies, hospitals and others) who are contracted to provide healthcare services to plan
members. These providers have agreed to see members under certain rules, including billing at
contracted rates. To get that price, a patient must be covered by a particular health plan that uses
that network. A patient has less or no insurance coverage if they see a provider who is out of their
network with some health plans.
4. Health Savings Account or Flexible Spending Account - If your employer provides either of these
programs, printed copies of the details will be helpful. A Health Savings Account is a medical
savings account available to individuals enrolled in a high-deductible health plan that meets certain
federal rules for out-of-pocket costs. The funds contributed to an account are not subject to federal
income tax at the time of deposit. Healthcare Flexible Spending Accounts are employerestablished benefit plans that reimburse employees for specified medical expenses as they are
incurred. The employee contributes funds to the account through a salary reduction agreement and
is able to withdraw the funds set aside to pay for medical bills.
Step 3
Begin using your “Health Plan Cost Comparison Worksheet” by using the information from your benefits
summary and drug formulary to fill in each section that applies to your insurance needs on the worksheet.
You could use a pencil to make changes or make a photo copy of the worksheet. If the data you need is
not available in the information provided to you, call your Human Resources, Benefits Administrator, case
manager, navigator or insurance representative.
6
Personal Health Experience Status Sheet
Choosing a healthcare plan can be very confusing. There are many things to consider, however, two of
the most important are cost and benefit design. When trying to determine your potential out-of-pocket
costs, it is important to determine which benefits you (and your family, if you are all on the same policy)
typically use and how often you use them. This will help you project your out-of-pocket costs for the
upcoming benefit year. The easiest way to do this is to ask yourself the following questions:
“In the past 12 months I have…”
Visited my primary care physician _____ times
Spent $ _____ in out of pocket costs (OOP)
· Spouse has visited his/her primary care physician _____ times
Spent $ _____ OOP
· Child(ren) have visited their primary care physician _____ times
Spent $ _____ OOP
Been seen by a specialist _____ times
Spent $ _____ OOP
· Spouse _____ times
Spent $ _____ OOP
· Child(ren) _____ times
Spent $ _____ OOP
Visited an ER or urgent care center _____ times.
Spent $ _____ OOP
· Spouse _____ times
Spent $ _____ OOP
· Child(ren) _____ times
Spent $ _____ OOP
Purchased _____ number of prescriptions (including for my family) at my local pharmacy. Spent $
_____ OOP
Been admitted to a hospital for an overnight stay _____ times.
· Spouse _____ times
· Child(ren) _____ times
Number of immunoglobulin therapy treatments _____
Spent $ _____ OOP
This edition of the toolkit reflects rules and protections already in place under the Affordable Care Act,
including no cost-sharing for certain preventive services and a ban on lifetime limits on benefits. Changes
that take effect in 2014 will be reflected in the next, updated IDF Health Insurance Toolkit publication and
include a ban on annual limits on benefits, the essential health benefits, and standardized levels of
coverage. For any unfamiliar acronyms or terms, see the Acronyms and Glossary section that begins on
page 20.
7
Health Plan Cost Comparison Worksheet
Healthcare Plans (put name of each plan offered in separate column)
1)
2)
3)
Name of plan
Plan Type (EPO, HMO, PPO, POS)
Does plan require you to choose primary care physician
(PCP)?
Yes
□
Yes
□
Yes
□
No
□
No
□
No
□
Yes
□
Yes
□
Yes
□
No
□
No
□
No
□
If so, is your current primary care physician in network?
Premium (this can be monthly, annually or per pay period)
$
$
$
Financial (deductable/coinsurance/annual limits) Note: Some services are covered before deductible is met
Deductible:
Individual
$
$
$
Family
$
$
$
Maximum out-of-pocket
Individual
Family
Co-Insurance – out-of-pocket (i.e. 90/10, 80/20, 70/30)
$
$
$
$
$
$
/
/
/
Is the deductible included in the out-of-pocket?
Yes □
Does the plan have annual max? (for all group plans and
new individual policies issued after 3/23/2010, the ACA Yes
restricts and phases out annual limits; the limit for 2012 is No
$1.25 million, unless the plan received a waiver)
If so, what is the limit?
$
Does the plan have life time max?
(no plan may impose a lifetime maximum on benefits that Yes
are considered essential)
No
If so, what is the limit?
$
(Worksheet continued on next page)
8
No □
□
□
Yes □
No □
Yes □
No □
Yes
No
□
□
Yes
No
□
□
$
□
□
Yes
No
$
$
□
□
Yes
No
$
□
□
Preventive Care Co-Pay (For a complete list of preventive services for which there is no co-pay allowed
under the ACA, go to http://www.healthcare.gov/news/factsheets/2010/07/preventive-services-list.html.)
Physical exam
$
$
$
Routine pediatric care
$
Immunizations (the ACA bans co-pays for recommended $
vaccines for children up to age 18 and adults)
Osteoporosis screening (the ACA bans co-pays for
$
women over 60 depending on risk factors)
$
$
$
$
$
$
Gynecological exams
$
$
$
Prostate screening
$
Mammograms (the ACA bans co-pays for exams every 1 $
to 2 years for women over 40)
$
$
$
$
Colorectal Cancer screening (the ACA bans co-pays for $
adults over 50)
$
$
Major Medical
Yes
□
Yes
□
Yes
□
No
□
No
□
No
□
(Do you have a copy of the plan's provider list?)
Out of Network Co-Insurance
Please note cost shares may vary with using out-ofnetwork providers. Indicate plan’s percentage of cost
share.
%
%
%
Outpatient Care Co-Pay (ongoing co-pays after deductible is met)
Physician office
$
$
$
Specialist
$
$
$
Surgery
$
$
$
Laboratory services
$
$
$
Immunoglobulin (Ig) infusions
$
$
$
Nursing visit ____ visits allowed per calendar year
$
$
$
Physician's and surgeon's services
$
$
$
Private room and board
$
$
$
Semi-private room and board
$
$
$
All drugs & medications
$
$
$
Hospital Care (Inpatient services)
(Worksheet continued on next page)
9
Emergency Care Per Visit Co-Pay (for group plans and individual policies created or issued after
3/23/2010, the ACA bans higher co-pays or co-insurance for out-of-network ER services)
Emergency room
$
$
$
Urgent care center
$
$
$
Pre-natal and post-natal care
$
$
$
Hospital services (mother and child)
$
$
$
Inpatient ___ visits allowed per calendar year
$
$
$
Outpatient ___ visits allowed per calendar year
$
$
$
Maternity Care
How many post delivery recovery days available
Substance Abuse Co-Pay
Mental Health Co-Pay (The Mental Health Parity and Addiction Equity Act prohibits plans from imposing
higher deductibles or co-pays or tighter limits on visits than are allowed for medical services in the plan)
Inpatient
Outpatient
_ visits allowed per calendar year
$
visits allowed per calendar year
$
Yes
□
$
Yes
□
$
Yes
□
No
□
No
□
No
□
Pharmacy Benefits Co-Pay
(do you have a copy of the plan's drug formulary list?)
$
$
Yearly deductible Individual
Yearly deductible Family
$
$
$
$
$
$
Co-pay Tier 1 (generics)
$
$
$
Co-pay Tier 2 (Formulary/brand)
$
$
$
Co-pay Tier 3 (Non-Formulary)
Co-insurance Tier 4 (Specialty Tier) - % cost share or copay
$
$
$
If your plan has a specialty tier with co-insurance is there
a maximum per prescription?
Yes
□
Yes
No
□
Yes
No
Is immunoglobulin therapy covered under the
pharmacy benefit?
Do you have more than one choice of ‘specialty’
pharmacy provider?
Is there an annual pharmacy maximum out-of-pocket?
Is there a preferred specialty pharmacy?
$
$
or
□
Yes
□
No
□
No
□
□
□
Yes
No
□
□
Yes
No
□
□
Yes
□
Yes
□
Yes
□
No
□
No
□
No
□
Yes
□
Yes
□
Yes
□
No
□
No
□
No
□
Yes
□
Yes
□
Yes
□
No
□
No
□
No
□
(Worksheet continued on next page)
10
or
% $
or
%
%
Other (if offered) (ongoing co-pays after deductible is met)
$
$
$
$
$
$
$
$
$
Skilled nursing facility (SNF)
$
$
$
Home healthcare
$
$
$
$
$
$
$
$
$
$
$
$
Chiropractic
visits allowed per calendar year
Short term rehabilitation – inpatient
Short term rehabilitation – outpatient
per calendar year
visits allowed per calendar year
Hospice care – Inpatient
Hospice care – outpatient
calendar year
Palliative care
_ visits allowed
visits allowed per
visits allowed per calendar year
Total Estimate of Cost
11
Summary of Benefits and Coverage (SBC)
and Uniform Glossary
Whether comparing health plan options from your employer or shopping for health coverage on your own,
benefit summaries will be easier to read and use in choosing or renewing a plan beginning September 23,
2012. Under the Affordable Care Act (ACA), all health insurance companies and employers offering
coverage will have to use the same standard form to summarize the benefits and coverage offered under
the plan. With each insurance company and employer using the same form, consumers can more clearly
compare plans and choose one, and can better understand the benefits and costs they have under the
plan in which they are enrolled.
The new, standard summaries will include information on important elements of the coverage, such as the
deductible, co-pays, services not covered by the plan, and whether enrollees need a referral to see a
specialist – all presented in a way that makes it easier for consumers to make an apples-to-apples
comparison of their coverage options. The Summary of Benefits and Coverage (SBC) must also include
“coverage examples” of two common medical conditions (managing diabetes and having a baby), offered
in a format modeled after the “Nutrition Facts” label consumers use now to make informed decisions about
food choices. All health insurance companies and employer plans must also provide consumers with a
uniform glossary of terms commonly used in health insurance coverage, such as “deductible,” “nonpreferred provider,” and “co-insurance.”
Some additional points to keep in mind:
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If an employer offers some benefits under a separate policy, such as prescription drug
coverage or mental health services, they can provide multiple forms, which may be confusing.
Starting in late 2013, employers will have to combine all information on one form.
The SBC requirement applies to all plans, whether you buy it on your own or get it from an
employer.
Health plans must automatically provide the standard summary to a person who completes an
application for coverage or to any person who requests a summary (within seven days).
Employers must provide the summary when coverage renews (30 days prior to renewal) and
upon request (within seven business days). Employers must also provide an updated summary
if there is a substantial change in coverage during the plan year.
For a sample of the new SBC, click here.
To see the Uniform Glossary of terms, click here.
12
Prior Authorizations
Prior Authorization is the process used by insurers to gain additional information, typically from your
physician or healthcare provider, before providing coverage of some medications, medical equipment and
supplies. Prior authorization differs from precertification, which is often required before inpatient
admissions and select hospital procedures and services. In the case of both prior authorization and precertification, the insurer may deny coverage if approval is not secured prior to accessing the treatment or
service. Please note that definitions of certain terms may vary across insurance companies.
Insurers make individual decisions on when prior authorization and pre-certifications are necessary. It is
important to check with your insurer to understand their requirements, including any restrictions on outof-network providers. Unfortunately, there are situations in which a formal prior authorization procedure
is not required, but a plan may still deny coverage of a medication or treatment.
If prior authorization is needed, discuss this with your physician to ensure they are aware of the
requirement. Follow up to ensure all of the necessary forms are completed and approved before
accessing the service.
Examples of documentation that are often required in order to access immunoglobulin therapy include:
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Diagnosis codes
Immunological workup such as quantitative serum immunoglobulin levels
Measurement of specific antibodies to vaccines, sometimes called vaccine challenge test results
Other pertinent information such as hospitalizations, use of antibiotics, and documented infections
Once prior authorization is granted, the process may need to be renewed after a defined period of time.
This is called a reauthorization. A physician may be required to provide a progress report and updated
tests to secure reauthorization. This will vary by plan and the benefit being approved. It is important to
keep track of when the authorization expires to maintain continuous coverage.
13
What if I am Denied Coverage?
Appeals and Grievances
Dealing with insurance companies can be a complicated and frustrating endeavor and even more so
when dealing with a chronic illness, such as a primary immunodeficiency disease. Should your insurance
plan deny coverage of a medically necessary treatment, you could be left in an anxious situation not
knowing how you will get your next dosage. Fortunately, there are options available to you that will allow
you to appeal your insurance company’s decision. In addition to filing an appeal, you may also wish to
speak with an insurance case manager, should your plan provide one, as a resource regarding your
grievance.
How to File an Internal Appeal
When you request an internal appeal, your insurance company may ask your provider for more
information in order to make a decision about the claim. They should inform you of the deadline to send
additional information and if a deadline is not given, call your insurer at the number on the back of your ID
card. Remember, you should receive the denial in writing. Be proactive and call your insurance company.
Steps in the Appeal Process
1. You have the right to appeal this decision in writing to the appropriate department. You can find
the address to submit appeals in the denial letter, your coverage documents or by contacting your
insurer using the member services telephone number on your ID card. Write a clear and simple
letter providing:
1. Pertinent clinical information regarding your health history and treatment history; Your
medical records documenting past drug trials and health history. Your prescribing physician
should have these.
2. History of any adverse reactions or side effects you have had to similar treatments
3. If your insurer requires the prescribing physician to complete a drug authorization form,
you should make sure this has been done; and
4. If you received a letter of denial for the treatment, ensure that the information provided
directly addresses the reasons for the denial.
5. If the dispute is over the medical necessity of your treatment, your physician’s support in
the form of a letter including studies supporting the benefit of the treatment in question is
invaluable. Request that your physician write a letter of medical necessity. A service is
medically necessary if it meets any one of the three standards below:
 The service or benefit will, or is reasonably expected to, prevent the onset of an
illness condition, or disability.
 The service or benefit will, or is reasonably expected to, reduce or ameliorate the
physical, mental or developmental effects of an illness, condition or disability.
 The service or benefit will assist the individual to achieve or maintain maximum
functional capacity in performing daily activities taking into account both the
functional capacity of the individual and those functional capacities that are
appropriate for individuals of the same age.
The letter should assert that the prescribed treatment is medically necessary and:

Any product on the formulary would not be as effective and/or would be harmful to
you.
 All other product or dosage alternatives on the plan’s formulary have been
ineffective or caused harm, or based on sound clinical evidence and
knowledge of the patient, are likely to be ineffective or cause harm.
6. Contact your insurer after submitting your request to make sure they have received
it.
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2. Your physician can request a peer-to-peer review to discuss the specific reason why this type of
treatment is needed for you if the initial appeal is unsuccessful.
3. Follow up. If your appeal is denied, go to the next level of appeal. Do not assume this happens
automatically – make sure you communicate your desire for a second-level, or Independent
External Review. This will be a reconsideration of your original claim by professionals with no
connection to your insurance plan. If the independent reviewers think your plan should cover your
claim, your health plan must cover it.
Your rights when you are denied coverage: The Affordable Care Act (ACA) includes new rules that
spell out how your plan must handle your appeal (usually called an “internal appeal”). If your plan still
denies payment after considering your appeal, the ACA permits you to have an independent review
organization decide whether to uphold or overturn the plan’s decision. This final check is often
referred to as an “external appeal.”
Under the new rules:
 When your plan denies a claim, it is required to notify you of the reason the claim was
denied, your right to file an internal appeal, your right to request an external review if your
internal appeal was unsuccessful, and the availability of a Consumer Assistance Program
(CAP) that can help you file an appeal or request a review (if your state has such a program).
 When you request an internal appeal, your plan must give you its decision within:
o 72 hours after receiving your request when you are appealing the denial of a claim for
urgent care. (If your appeal concerns urgent care, you may be able to have the
internal appeal and external review take place at the same time).
o 30 days for denials of non-urgent care you have not yet received.
o 60 days for denials of services you have already received.
 If after internal appeal the plan still denies your request for payment or services, you can ask
for an independent external review. Your plan must include information on your denial notice
about how to request this review. If the external reviewer overturns your insurer’s denial, your
insurer must give you the payments or services requested in your claim.
 How much these new rules will change your current appeal rights depends on the state you
live in and the type of plan you have. Some group plans may require more than one level of
internal appeal before you are allowed to submit a request for an external review. However,
all levels of the internal appeals process must be completed within the timeframes above.
15
Medicare
Medicare is health and hospitalization insurance for people older than 65 or for those who are
disabled. Most portions of Medicare are not free and premiums are deducted from your Social
Security benefit checks unless you make other payment arrangements.
There are three levels of Medicare Coverage available.
Medicare Part A - Hospital Insurance
 Part A Medicare is provided at no charge to anyone disabled or over the age of 65 who has
paid Medicare taxes for at least 10 years. It covers the hospitalization costs, over and above
your deductible, for the first 60 days of your hospital stay.
Medicare Part B - Doctor, Outpatient and Clinical Services
 To obtain Medicare Part B coverage, you must pay an additional premium.
 This coverage pays for 80% of approved doctor and outpatient services. You will be responsible
for the remaining 20%. Be aware, however, that not all doctors accept Medicare.
 Current Medicare law creates a special provision which creates a benefit for patients with primary
immunodeficiency disease to be covered for home infusions of immunoglobulin therapy under
Medicare Part B. Unfortunately, current law specifically excludes Medicare coverage of the items
and services necessary to administer intravenous immunoglobulin (IVIG) in the home, including
the services of a nurse to perform the infusion, rendering this benefit hollow. For this reason, the
majority of Medicare beneficiaries with primary immunodeficiency diseases are forced to either
use subcutaneous immunoglobulin (SCIG) or receive IVIG only in the outpatient hospital, infusion
center or physician office settings.
Medigap Supplemental Insurance
 Medigap is supplemental private insurance that will pay for the 20% of costs not covered by
Medicare Plan B. If you do not sign up for Medigap at age 65, you can enroll later, but you will be
subject to underwriting, which may be a problem if you are in poor health or have chronic
conditions. Signing up at age 65 is your best option, and you are guaranteed to get the insurance
at the lowest cost, and no one can take it away.
 If you are a person with Medicare under 65 and have a disability, you might not be able to buy the
Medigap policy you want, or any Medigap policy, until you turn 65. Federal law does not require
insurance companies to sell Medigap policies to people under 65. However, some states require
Medigap insurance companies to sell you a Medigap policy, even if you are under 65. At the time
of the printing of the “2012 Choosing a Medigap Policy: A Guide to Health Insurance for People
with Medicare,” the following states required insurance companies to offer at least one kind of
Medigap policy to people with Medicare for people under 65:
California; Colorado; Connecticut; Delaware; Florida; Georgia; Hawaii; Illinois; Kansas;
Louisiana; Maine; Maryland; Massachusetts; Michigan; Minnesota; Mississippi; Missouri; New
Hampshire; New Jersey; New York; North Carolina; Oklahoma; Oregon; Pennsylvania; South
Dakota; Tennessee; Texas; Vermont; and Wisconsin.
Medicare Part C – Medicare Advantage Plan
 A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you
may have as part of Medicare. Medicare Advantage Plans, sometimes called “Part
 C” or “MA Plans,” are offered by private companies approved by Medicare.
 If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital
Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may
16



offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most
include Medicare prescription drug coverage (Part D), however not all do.
Prior to enrollment, you can call the Medicare Advantage Plan you are considering to verify if
they provide prescription drug coverage (Part D) in their plan.
Like with private insurance, it is important to check on individual Medicare Advantage Plans to
ensure that they will cover immunoglobulin (Ig) replacement therapy treatment.
Medicare Part D – Prescription Drug Coverage
 Medicare offers prescription drug coverage to all beneficiaries. If you decide not to join a
Medicare drug plan when you are first eligible, and you do not have other creditable prescription
drug coverage, you will likely pay a late enrollment penalty.
 To get Medicare prescription drug coverage, you must join a plan run by an insurance company
or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
 In 2012, Part D enrollees will continue receiving a 50% discount on the total cost of their brandname drugs while in the “donut hole” or coverage gap. The full retail cost of the drugs will still
apply to getting out of the donut hole even though 50% was paid for by the pharmaceutical
manufacturers. Enrollees will pay a maximum of 86% co-pay on generic drugs while in the
coverage gap.
For more information on the levels of Medicare visit www.medicare.gov or call 800.633.4227.
Those who are already receiving Social Security benefits will automatically be enrolled in Medicare
Parts A and B. However, because there is a premium for Part B coverage, you have the option of
turning it down. You will be contacted by mail a few months before you become eligible and given all
the information you need. (Note: Residents of Puerto Rico or foreign countries will not receive Part B
automatically. They must elect this benefit.)
Even if you keep working after you turn 65, you should sign up for Medicare Part A. If you have health
coverage through your employer or union, Part A may still help pay some of the costs not covered by your
group health plan. Call the Social Security Administration at 800.772.1213 to sign up. However, you may
want to wait to sign up for Medicare Part B if you or your spouse are working and have group health
coverage through you or your spouse's employer or union. You would have to pay the monthly Medicare
Part B premium, and the Medicare Part B benefits may be of limited value to you as long as the group
health plan is the primary payer of your medical bills.
However, if you or your spouse (or family member if you are disabled) is still working and you have
insurance through that employer (including the Federal Employee Health Benefits Program) or union,
contact your employer or union benefits administrator to find out how your insurance works with
Medicare. It may be to your advantage to delay Part B enrollment.
You can sign up for Part B any time you have current employer insurance. (COBRA and retiree
insurance do not count as current employer insurance.)
Once your employment ends, three things happen:
1. You have eight months to sign up for Part B without a penalty. This period will run whether or not
you choose COBRA. If you choose COBRA, don't wait until your COBRA ends to enroll in Part B.
If you don't enroll in Part B during the eight months, you may have to pay a penalty; you won't be
able to enroll until the next General Enrollment Period; and you'll
2. have to wait before your coverage begins. (You may elect Part B coverage during the
General Enrollment Period, which extends from January 1 through March 31 each year.
17
3. Enrollment becomes effective on July 1 of the same year however you will not be able to elect a
Part D plan until Open Enrollment which extends from October 15 through December 7 each
year.)
4. You may be able to get COBRA coverage, which continues your health insurance through the
employer's plan (in most cases for only 18 months) and probably at a higher cost to you.
5. If you already have COBRA coverage when you enroll in Medicare, your COBRA will probably
end. If you become eligible for COBRA coverage after you are already enrolled in Medicare,
you must be allowed to take the COBRA coverage. It will always be secondary to Medicare
(unless you have End Stage Renal Disease).
TRICARE is insurance for active duty military or retirees and their families. When you have Medicare Part
A, you must have Medicare Part B to keep your TRICARE coverage.
In certain cases, you can delay your Medicare Part B enrollment without having to pay higher
premiums. If you didn’t take Medicare Part B when you were first eligible because you or your spouse
were working and had group health plan coverage through you or your spouse’s employer or union, you
can sign up for Medicare Part B during a Special Enrollment Period (SEP). You can sign up:


Anytime you are still covered by the employer or union group health plan through your or your
spouse’s current or active employment, or
During the eight months following the month the employer or union group health plan coverage
ends or when the employment ends (whichever is first).
Please be aware that if you decide to pick up Part B coverage at a later date, the cost of Part B may go
up 10% for each 12-month period that you could have had Part B but did not sign up for it, unless you
have insurance from your or your spouse's current job. Also, if you decline or cancel your Part B
coverage, you will not be eligible to receive Medicare covered preventive services.
In most cases you will have to pay that penalty every month for as long as you have Medicare. If you are
enrolled in Medicare because of a disability and pay premium penalties, once you turn 65, you no longer
have to pay the premium penalty.
When you are covered by more than one insurance plan and any of the following situations apply to you,
your other insurance may be primary to Medicare, meaning the other insurance pays first:
You have Medicare; are still working; and are covered by your employer’s health insurance plan; you have
Medicare, are retired or disabled, but your spouse is working and has a health plan that also covers you;
or you are injured on the job, in an automobile accident, or slip and fall at a shopping center (worker’s
compensation, auto insurance or liability insurance may cover the cost of medical care related to the
accident).
Medicare has a dedicated “Coordination of Benefits Contractor” that keeps track of when Medicare is
primary or when another insurer is primary. You can contact the Coordination of Benefits Contractor at
800.999.1118 for questions about, or to report changes in, your primary insurance. If you have other
insurance and it pays after Medicare, it is called your supplemental insurance.
The Medicare publication, Medicare and Other Health Benefits: Your Guide to Who Pays First
(http://www.medicare.gov/Publications/Pubs/pdf/02179.pdf) contains additional information on this topic
that you may find useful.
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19
Acronyms and Glossary
Healthcare and Insurance Related Acronyms
Glossary of Healthcare Terms
ACA:
ACO:
CAP:
CHIP:
COB:
COBRA:
DME:
EOB:
EPO:
FMLA:
FPL:
FSA:
GEP:
HDHP:
HHS:
HIPAA:
HMO:
HRA:
HSA:
MAP:
MLR:
OEP:
OON:
OOP:
PBM:
PCIP:
PCP:
PDP:
PFTs:
POS:
PPO:
SEP:
SNF:
TPA:
UCR:
Affordable Care Act
Accountable Care Organization
Consumer Assistance Program
Children’s Health Insurance Program
Coordination of Benefits
Consolidated Omnibus Budget Reconciliation Act
Durable Medical Equipment
Explanation of Benefits
Exclusive Provider Organization
Family and Medical Leave Act
Federal Poverty Level
Flexible Spending Account
General Enrollment Period
High Deductible Health Plan
Health and Human Services
Health Insurance Portability and Accountability Act
Health Maintenance Organization
Health Reimbursement Arrangement
Health Savings Account
Medicare Advantage Plan
Medical Loss Ratio
Open Enrollment Period
Out-Of-Network
Out-Of-Pocket
Pharmacy Benefit Manager
Pre-existing Condition Insurance Plan
Primary Care Physician
Prescription Drug Plan
Pulmonary Function Tests
Point-of-Service Plan
Preferred Provider Organization
Special Enrollment Period
Skilled Nursing Facility
Third Party Administrator
Usual, Customary and Reasonable
Healthcare Plans and Systems
Catastrophic Plan: A healthcare plan that only covers certain types of expensive care, like
hospitalizations. It may also include plans that have a high deductible, so that your plan begins to pay
only after you have first paid up to a certain amount for covered services.
Children’s Health Insurance Program (CHIP): Insurance program jointly funded by state and federal
20
government that provides health insurance to low-income children and, in some states, pregnant women
in families who earn too much income to qualify for Medicaid but cannot afford to purchase private health
insurance coverage.
Durable Medical Equipment (DME): Specialized equipment that is prescribed by a healthcare provider
and furnished by a supplier, which is to be used in a patient's home or institutions constituting a home.
DME may include but are not limited to items such as standard oxygen delivery systems, hospital bed,
wheelchair, walker, traction apparatus, intermittent positive pressure breathing machine, brace, crutch or
any other items that are determined Medically Necessary.
EPO (Exclusive Provider Organization) Plan: A managed care plan in which services are
covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an
emergency).
Flexible Spending Account (FSA): Accounts offered and administered by employers that allow
employees to set aside, out of their paycheck, pretax dollars to pay for the employee’s share of
insurance premiums or medical expenses not covered by the employer’s health plan. The employer
may also make contributions to a FSA. Typically, benefits or cash must be used within the given benefit
year or the employee loses the money. Flexible spending accounts can also be provided to cover
childcare expenses, but those accounts must be established separately from medical FSAs.
HMO (Health Maintenance Organization): An insurance plan that usually limits coverage to care from
doctors who work for or contract with the HMO. Generally the plan will not cover out-of-network care
except in an emergency, and may require you to live or work in its service area to be eligible for
coverage. HMOs often provide integrated care and focus on prevention and wellness.
Health Reimbursement Arrangement (HRA): A medical savings account to which employers
contribute funds that can cover an employee’s costs not covered by the plan. The employer can
choose whether or not to allow unused funds to rollover to the following year.
Health Savings Account (HSA): A medical savings account available to taxpayers who are enrolled in
a High Deductible Health Plan (HDHP) that meets federal rules. In 2012, to qualify for use with an HSA,
an HDHP plan must have a minimum deductible of $1,200 for an individual plan and $2,400 for a family
plan, and an out-of-pocket maximum of $6,050 for an individual plan and $12,100 for a family plan
(these number are adjusted annually). The funds contributed to the account are not subject to federal
income tax at the time of deposit. Funds must be used to pay for qualified medical expenses. Unlike a
Flexible Spending Account (FSA), funds roll over year to year if you do not spend them.
High Deductible Health Plan (HDHP): A plan that features higher deductibles than traditional
insurance plans. HDHPs can be combined with a health savings account (under certain circumstances)
or a health reimbursement arrangement to allow you to pay for qualified out-of- pocket medical
expenses on a pre-tax basis. See Health Savings Account (HSA).
High Risk Pool Plan (State): Safety net plan that provides coverage if you have been locked out of the
individual insurance market because of a pre-existing condition. May also offer coverage if you are HIPAA
eligible or meet other requirements. High-risk pool plans offer health insurance coverage that is
subsidized by a state government. Typically, your premium is up to twice as much as you would pay for
individual coverage if you were healthy. Not all states offer high risk pools, and those that do have distinct
rules in terms of cost, eligibility and benefits.
Managed care plan: A plan that generally provides comprehensive health services to its’ members, and
offers financial incentives for patients to use the providers who belong to the plan. Examples include:
21
health maintenance organizations (HMOs), preferred provider organizations (PPOs), exclusive provider
organizations (EPOs), and point of service plans (POSs).
Medicaid: A state-administered health insurance program for low-income families and children,
pregnant women, the elderly, people with disabilities, and in some states, other adults. The federal
government provides a portion of the funding and sets guidelines. States also have choices in how they
design their program, so Medicaid programs and eligibility vary state by state and may have a different
name in your state.
Medicare: A federal health insurance program for people who are age 65 or older and certain
younger people with disabilities. It also covers people with End-Stage Renal Disease.
Medicare Part A: Hospital insurance that helps cover inpatient care in hospitals, skilled nursing
facility, hospice and home care.
Medicare Part B: Medical coverage that helps to cover medically-necessary services like doctors'
services, outpatient care, home health services, other medical services and preventive services.
Medicare Advantage (Medicare Part C): A type of Medicare health plan offered by a private
company that contract with Medicare to provide Medicare Part A and Part B benefits.
Medicare Part D: A program that helps pay for prescription drugs for people with Medicare who join a
plan that includes Medicare prescription drug coverage.
POS (Point-of-Service Plan) Plan: A type of plan in which you pay less if you use doctors, hospitals,
and other healthcare providers that belong to the plan’s network. POS plans may also require you to
get a referral from your primary care doctor in order to see a specialist.
PPO (Preferred Provider Organization): A type of healthcare plan that contracts with medical providers,
such as hospitals and doctors, to create a network of participating providers. You pay less if you use
providers that belong to the plan’s network. You can use doctors, hospitals and providers outside of the
network for an additional cost.
Pre-existing Condition Insurance Plan (PCIP): A new program that will provide a health coverage
option if you have been uninsured for at least six months, have a pre-existing condition, and have
been denied coverage (or offered insurance without coverage of the pre-existing condition) by a
private insurance company. Provides coverage until 2014 when you will have access to affordable
health insurance choices through an Exchange, and you can no longer be discriminated against based
on a pre-existing condition. Every state has a PCIP program; in some states it is operated by the state
while in others it is operated by the federal government.
Pharmacy Benefit Manager (PBM): A third party administrator of prescription drug programs. They
are primarily responsible for processing and paying prescription drug claims. They also are responsible
for developing and maintaining the formulary, contracting with pharmacies, and negotiating discounts
and rebates with drug manufacturers.
PCP (Primary Care Physician): A physician who usually is the first health professional to examine a
patient and who recommends secondary care physicians, medical or surgical specialists with expertise
in the patient's specific health problem, if further treatment is needed. Formerly known as the family
doctor.
22
Health Insurance and Reform
Accountable Care Organization (ACO): A group of healthcare providers who give coordinated care,
chronic disease management, and thereby improve the quality of patient care. The organization’s
payment is tied to achieving healthcare quality goals and outcomes that result in cost savings. ACOs
can include various types of doctors – primary care, specialists, etc. – as well as other medical
providers (nurses, physician’s assistants, etc.) and institutions (hospitals, multi-physician practices).
Affordable Care Act (ACA): The comprehensive healthcare reform law enacted in March 2010. The
law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on
March 23, 2010 and was amended by the Healthcare and Education Reconciliation Act on March 30,
2010. Affordable Care Act refers to the final, amended version of the law.
Allowed Charge: Discounted fees that insurers will recognize and pay for covered services. Insurers
negotiate these discounts with providers in their health plan network, and network providers agree to
accept the allowed charge as payment in full. Each insurer has its own schedule of allowed charges.
Annual Limit: A cap on the benefits your insurance company will pay in a year while you are enrolled in
a health insurance plan. Annual caps are sometimes placed on particular services such as prescriptions
or hospitalizations. Annual limits may be placed on the dollar amount of covered services or on the
number of visits for a particular service. After the annual limit is reached, you must pay all associated
healthcare costs for the rest of the year. Under the Affordable Care Act, all group health plans (existing
and new) and all new individual policies (issued after 3/23/2010) must phase out annual limits. Plan or
policy years starting after 9/23/2011 but before 9/23/2012 cannot have an annual limit lower than $1.25
million. For the following year, plans cannot have an annual limit lower than $2 million. No annual dollar
limits are allowed on “essential” services in 2014.
Balance Billing: The practice of billing a patient for charges not paid by his/her insurance plan because
the charges are in excess of covered amounts. Balance billing amounts will often be charges that are
above the usual and customary rates.
Benefits: The healthcare items or services covered under a health insurance plan. Covered benefits and
excluded services are defined in the health insurance plan’s coverage documents. In Medicaid or CHIP,
covered benefits and excluded services are defined in state program rules.
Biosimilar Biological Products: The generic version of more complicated medications. Technically,
they are reproductions of biotechnologically manufactured biopharmaceuticals that partially mimic
proteins naturally present in the body.
Care Coordination: The process of organizing your treatment across several healthcare providers.
Medical homes and accountable care organizations (see definition) are two common ways to coordinate
care.
Chronic Disease Management: An integrated care approach to managing illness – typically using
multiple healthcare providers including various physicians, nurses, and others – which includes
screenings, check-ups, monitoring and coordinating treatment, and patient education. It can improve
quality of life while reducing healthcare costs if you have a chronic disease, by preventing or minimizing
the effects of a disease.
Claim: A request for payment that you or your healthcare provider submits to your health insurer when
you get items or services you think are covered.
23
COBRA: (Consolidated Omnibus Budget Reconciliation Act) A federal law that may allow you to
temporarily keep health coverage if your employment ends, you lose coverage as a dependent of the
covered employee, or if there is another qualifying event. COBRA requires you pay 100% of the
premiums, including the share the employer used to pay, plus a small administrative fee.
Co-insurance: A form of medical cost sharing in a health insurance plan that requires an insured person
to pay a stated percentage of medical expenses after the deductible amount, if any, was paid. Once any
deductible amount and coinsurance are paid, the insurer is responsible for the rest of the reimbursement
for covered benefits up to allowed charges: the individual could also be responsible for any charges in
excess of what the insurer determines to be ‘usual, customary and reasonable.’
Co-payment: A flat dollar amount you must pay for a covered program. Example: you may have to pay a
$15 copayment for each covered visit to a primary care doctor.
Cost Sharing: The share of costs covered by your insurance that you pay out-of-pocket. Generally
includes deductibles, coinsurance and copayments, or similar charges, but it does not include
premiums, balance billing amounts for non-network providers, or the cost of non-covered services. Cost
sharing in Medicaid and CHIP also includes premiums.
Creditable Coverage: Health insurance coverage under any of the following: a group health plan;
individual health insurance; student health insurance; Medicare; Medicaid; CHAMPUS and TRICARE;
Veterans Administration (VA) coverage; the Federal Employees Health Benefits Program; Indian Health
Service; the Peace Corps; Public Health Plan (any plan established or maintained by a State, the U.S.
government, a foreign country), including the new federal high risk pool (PCIP, or the Pre-Existing
Condition Insurance Program); Children’s Health Insurance Program (CHIP) or a state health insurance
high risk pool. If you have prior creditable coverage, it will reduce the length of a pre-existing condition
exclusion period under new job-based coverage.
Depending on state law, this may also apply to other types of coverage, such as state high risk
pools, in your state.
Deductible: The amount you must pay for covered care before your health insurance begins to pay.
Insurers apply and structure deductibles differently. Example: under one plan, a comprehensive
deductible might apply to all services while another plan might have separate deductibles for benefits
such as prescription drug coverage. Some plans may also cover some services before the deductible is
met, such annual exams.
Dependent Coverage: Insurance coverage for family members of the policyholder, such as spouses,
children, or partners. Under the Affordable Care Act, plans must cover children up to age 26 on their
parent’s policy.
Disability: A limit in a range of major life activities. This includes activities like seeing, hearing, walking
and tasks like thinking and working. Different state, federal or private programs may have different
disability standards. A legal definition of disability can be found at: www.ada.gov/pubs/ada.htm
Donut Hole, Medicare Prescription Drug: Most plans with Medicare prescription drug coverage (Part D)
have a coverage gap, called a donut hole. This means that after you and your drug plan have spent a
certain amount of money for covered drugs you have to pay all costs out-of-pocket for your prescriptions
up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug
plan helps pay for covered drugs again.
24
Emergency Room Services: Evaluation and treatment of an illness, injury or condition that needs
immediate medical attention in an emergency room.
Essential Health Benefits: A set of healthcare service categories that must be covered by certain plans,
starting in 2014. The Affordable Care Act defines essential health benefits to “include at least the following
general categories and the items and services covered within the categories: ambulatory patient services;
emergency services; hospitalization; maternity and newborn care; mental health and substance use
disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative
services and devices; laboratory services; preventive and wellness services and chronic disease
management; and pediatric services, including oral and vision care.’’
All new plans sold to individuals and small businesses, including those offered in Exchanges, and all
Medicaid state plans must cover these services by 2014.
Starting with plan years or policy years that began on or after September 23, 2010, health plans can no
longer impose a lifetime dollar limit on spending for these services. All plans, except grandfathered
individual health insurance policies, must begin phasing out annual dollar spending limits for these
services starting with plan/policy years that began on or after September 23, 2010. For the majority of
health insurance plans, annual dollar limits on essential health benefits will be completely phased out by
2014.
The Department of Health and Human Services has issued guidance outlining a process for selecting
EHBs in each state, based on existing coverage options in the small group and other employer plans.
States are expected to make these choices in the Fall of 2012. Learn more about this process at
www.healthcare.gov.
Exchange: New state-based organizations that will be set up to create a more organized and
competitive market place for individuals and small businesses to buy health insurance. Exchanges will
offer a choice of different health plans, which meet certain benefits and cost standards and provide
information to help consumers better understand their options.
Exclusions: Items or services that are not covered under a contract for insurance and which an
insurance company won’t pay. Example: your policy may not cover pregnancy care or any services
related to a pre-existing condition.
Explanation of Benefits (EOB): A form or document sent by the insurance company to both enrollees
and providers. The document provides necessary information about claim payments and patient
responsibility amounts of healthcare services however it is not a bill. It should include data on what was
paid or is in process of being reviewed for payment by the insurance company. Your EOBs may help
you track your healthcare expenditures and serve as a reminder of the medical services you received
during the past several years.
Family and Medical Leave Act (FMLA): A federal law that guarantees up to 12 weeks of job
protected leave for certain employees when they need to take time off due to serious illness or
disability, to have or adopt a child or to care for another family member. When on leave under FMLA,
you can continue coverage under your job-based plan. Learn more about FMLA at:
http://www.dol.gov/whd/fmla.
Federal Poverty Level (FPL): A measure of income level issued annually by the Department of Health
and Human Services. FPL is used to determine eligibility for certain programs and benefits. For more
information on FPL please visit: http://aspe.hhs.gov/poverty/12poverty.
25
Fee for Service: A reimbursement plan in which doctors and other healthcare providers are paid for
each service performed, such as for tests and office visits.
Flexible Benefits Plan: Offers employees a choice between various benefits including cash, life
insurance, health insurance, vacations, retirement plans, and child care. Although a common core of
benefits may be required, you can choose how your remaining benefit dollars are to be allocated for each
type of benefit from the total amount promised by the employer. Sometimes you can contribute more for
additional coverage. Also known as a Cafeteria plan or IRS 125 Plan.
Formulary: A list of drugs your insurance plan covers. May include how much you pay for each drug. If
the plan categorizes drugs into different groups requiring different co-pays – also known as tiers – then
the formulary may list drugs by these tiers. Formularies may include both generic drugs and brand-name
drugs.
Fully Insured Job-based Plan: A plan in which the employer contracts with an insurer to assume
financial responsibility for the enrollees’ medical claims and for all incurred administrative costs.
General Enrollment Period: Medicare beneficiaries who did not enroll in Part B when they first became
eligible for Medicare may elect Part B coverage during the General Enrollment Period, which extends
from January 1 through March 31 each year. Enrollment becomes effective on July 1 of the same year.
Grandfathered Health Plan: As defined in the Affordable Care Act, a group health plan that was
created—or an individual health insurance policy that was purchased—on or before March 23, 2010.
Grandfathered plans are exempt from many changes required under the Affordable Care Act. Plans or
policies may lose their grandfathered status if they make certain significant changes that reduce benefits
or increase costs to consumers. A health plan must disclose in its plan materials whether it considers itself
to be a grandfathered plan and must also advise consumers how to contact the U.S. Department of Labor
or the U.S. Department of Health and Human Services with questions. Also see “New Plan” below.
Guaranteed Issue: A requirement that health plans must permit you to enroll regardless of health
status, age, gender or other factors that might predict the use of health services. Except in some states,
guaranteed issue does not limit how much you can be charged if you enroll.
Guaranteed Renewal: A requirement that your health insurance issuer must offer to renew your policy
as long as you continue to pay premiums. Except in some states, guaranteed renewal does not limit
how much you can be charged if you renew your coverage.
Healthcare Workforce Development: The use of incentives and recruiting to encourage people to
enter into healthcare professions such as primary care and to encourage providers to practice in
underserved areas.
Health Insurance Portability and Accountability Act (HIPAA): A 1996 federal act that eliminated
discrimination by health insurers for those with preexisting medical conditions. Example: when leaving a
group policy, patients cannot be denied coverage in other group policies based on a pre-existing medical
condition. In order to qualify for HIPPA, you must meet the following two conditions: (1) you have had 18
months of consecutive, continuous prior health coverage, and (2) you must get new coverage with
another group medical plan within 63 days. Many insurance plans offer open-enrollment periods when
anyone can join, regardless of preexisting conditions.
Health Status: Refers to your medical conditions (both physical and mental health), claims experience,
receipt of healthcare, medical history, genetic information, evidence of insurability and disability.
26
HIPAA Eligible Individual: Your status once you have had 18 months of continuous creditable health
coverage. To be HIPAA eligible, at least the last day of your creditable coverage must have been under a
group health plan: you also must have used up any COBRA or state continuation coverage for which you
are eligible; you must not be eligible for Medicare or Medicaid; you must not have other health insurance;
and you must apply for individual health insurance within 63 days of losing your prior creditable coverage.
When you are buying individual health insurance, HIPAA eligibility gives you greater protections than you
would otherwise have under state law.
Home Healthcare: Healthcare services and supplies in your home that a doctor approves under a plan of
care established by your doctor.
Individual Health Insurance Policy: Policies for people who are not connected to job-based coverage.
Individual health insurance policies are regulated under state law. Note that the phrase “individual
policies” when used in this way – policies that are unconnected to employment – can be used for policies
that cover a single person or multiple people (families, mother and dependent child, husband and wife,
etc.).
Individual Responsibility: Under the Affordable Care Act, starting in 2014, you must be enrolled in a
health insurance plan that meets basic minimum standards. If you aren’t, you may be required to pay a
penalty. Exempt from this are people with very low income for whom coverage is unaffordable based in
their household income, or for other reasons, including religious beliefs.
In Network Provider: A physician, certified nurse midwife, hospital, skilled nursing facility, home
healthcare agency, or any other duly licensed or certified institution or health professional under contract
with your insurance provider.
Insurance Co-Op: A non-profit entity in which the same people who own the company are insured
by the company. Cooperatives can be formed at a national, state or local level, and can include
doctors, hospitals and businesses as member-owners.
Job-based Health Plan: Coverage that is offered to an employee (and often his or her family) by an
employer.
Lifetime Limit: A cap on the total lifetime benefits you may get from your insurance policy. An insurance
company may impose a total lifetime dollar limit on benefits (like $1 million) or limit specific benefits (like
a $200,000 lifetime cap on organ transplants or one gastric bypass per lifetime) or a combination of the
two. After a lifetime limit is reached, the insurance plan will no longer pay for covered services. By
September 23, 2011, the majority of policies should not have lifetime dollar limits on essential health
benefits.
Long-Term Care: Medical and non-medical services provided to people who are unable to perform basic
activities of daily living such as dressing or bathing. Long-term supports and services can be provided at
home, in the community, in assisted living or in nursing homes. Individuals may need long-term supports
and services at any age. Medicare and most health insurance plans do not pay for long-term care.
Managed care provisions: Features within health plans that provide insurers with a way to manage
the cost, use and quality of healthcare services received by group members. Examples of managed
care provisions include:

Preadmission certification - Authorization for hospital admission given by a healthcare
provider to a group member prior to hospitalization. Failure to obtain a preadmission
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


certification in non-emergency situations reduces or eliminates the healthcare provider’s
obligation to pay for services rendered.
Utilization review - The process of reviewing the appropriateness and quality of care provided
to patients. Utilization review may take place before, during, or after the services are rendered.
Preadmission testing - Requirement designed to encourage patients to obtain necessary
diagnostic services on an outpatient basis prior to non-emergency hospital admission. The
testing is designed to reduce the length of a hospital stay.
Non-emergency weekend admission restriction - A requirement that imposes limits on
reimbursement to patients for non-emergency weekend hospital admissions.
Second surgical opinion - A cost-management strategy that encourages or requires patients
to obtain the opinion of another doctor after a physician has recommended that a nonemergency or elective surgery be performed. Programs may be voluntary or mandatory in that
reimbursement is reduced or denied if the participant does not obtain the second opinion.
Plans usually require that such opinions be obtained from board-certified specialists with no
personal or financial interest in the outcome.
Medical Loss Ratio (MLR): A financial measurement used in the Affordable Care Act to encourage
health plans to provide value to enrollees. Example: If an insurer uses 80 cents of every premium dollar
to pay its customers’ medical claims and activities that improve the quality of care, the company has a
medical loss ratio of 80%. This indicates that the insurer is using the remaining 20 cents of each
premium dollar to pay overhead expenses, including salaries, administrative costs, and agent
commissions. The Affordable Care Act sets minimum medical loss ratios for different markets, as do
some state laws. Insurers who do not meet the minimum MLR must issue rebates to policy holders
beginning in 2012.
Medically Necessary: Services or supplies that are needed for the diagnosis or treatment of your
health condition and meet accepted standards of medical practice. Definitions of medical necessity vary
by plan.
Medical Underwriting: A process used by insurance companies that uses your health status when you
are applying for health insurance coverage to determine whether to offer you coverage, at what price
and with what exclusions or limits.
Minimum Essential Coverage: The type of coverage an individual needs to have to meet the individual
responsibility requirement under the Affordable Care Act. This includes individual market policies, jobbased coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
New Plan: As referenced in the Affordable Care Act, a health plan that is not grandfathered and therefore
subject to all of the reforms in the Affordable Care Act. In the individual health insurance market, a plan
that your family is purchasing for the first time. In the group health insurance market, a plan that your
employer is offering for the first time. New employees and new family members may be added to existing
grandfathered group plans – so a plan that is new to you and your family may still be a grandfathered
plan.
In both the individual and group markets, a plan that loses its grandfathered status will be considered a
new plan. This happens when it makes significant changes to the plan, such as reducing benefits or
increasing cost-sharing for enrollees. Also see “Grandfathered Plan” above.
Nondiscrimination: A requirement that job-based insurance not discriminate based on health status
by denying or restricting health coverage, or charging more. Job-based plans can restrict coverage
based on other factors such as part-time employment that are not related to health status.
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Open Enrollment Period (OEP): The period of time set up to allow you to choose from available plans,
usually once a year.
Out-of-Network (OON) Providers: A duly licensed or certified institution or health professional not
under contract with your insurance provider.
Out-of-Pocket Costs: Your expenses for medical care that are not reimbursed by insurance. Out-ofpocket costs include deductibles, coinsurance and copayments for covered services plus all costs for
services that are not covered.
Out-of-Pocket Limit (OOP): The maximum amount you will be required to pay for covered services in a
year. Generally, this includes the deductible, coinsurance, and copayments (varies from plan to plan).
Example: In some plans the out-of-pocket limit does not include cost sharing for all services, such as
prescription drugs. Plans may have different out-of-pocket limits for different services. In Medicaid and
CHIP, the limit includes premiums. Additionally, many plans do not have out-of-pocket limits.
Plan Year: A 12-month period of benefits coverage under a group health plan. This 12-month period
might be different than the calendar year.
Policy Year: A 12-month period of benefits coverage under an individual health insurance plan. This
12-month period might be different than the calendar year.
Pre-authorization: A pre-authorization requirement means that the insurance company will not pay for
a service unless the provider gets permission to provide the service. This permission is to ensure that a
patient has benefit dollars remaining and that a particular kind of service is eligible for payment under
the patient's contract. Authorization could be granted retroactively after receiving emergency care;
generally a patient or hospital may have a 24-hour window to notify a payer.
Pre-certification: A pre-certification requirement means that a payer must review the medical
necessity of a proposed service and provide a certification number before a claim will be paid. This is
often true with augmentation therapy as well as other elective procedures. A physician or nurse with the
payer must review a physician's order and the medical record to agree that a proposed procedure is
medically appropriate. (Many insurers have adopted strict guidelines in regards to coverage for
augmentation therapy.)
Pre-existing Condition (Job-based Coverage): Any condition (either physical or mental) including a
disability for which medical advice, diagnosis, care, or treatment was recommended or received within
the 6-month period ending on your enrollment date in a health insurance plan. Genetic information,
without a diagnosis of a disease or a condition, cannot be treated as a pre- existing condition.
Pregnancy cannot be considered a pre-existing condition and newborns, newly adopted children and
children placed for adoption who are enrolled within 30 days cannot be subject to pre-existing
condition exclusions. This term is defined under state law and varies significantly by state.
Pre-existing Condition Exclusion Period (Job-based Coverage)*: The time period during which a
health plan won’t pay for care relating to a pre-existing condition. This cannot exceed 12 months for a
regular enrollee or 18 months for a late-enrollee.
Pre-existing Condition Exclusion Period (Individual Policy)*: The time period during which an
individual policy will not pay for care relating to a pre-existing condition. Conditions may be excluded
permanently (known as an exclusionary rider). Rules on pre-existing condition exclusion periods in
individual policies vary widely by state.
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*Pre-existing conditions exclusions for children under age 19 are prohibited for plan years effective after
September 23, 2010 and will be prohibited for adults for plan years effective after January 1, 2014.
Premium: A monthly payment you make to your insurer to get and keep insurance coverage.
Premiums can be paid by employers, unions, employees or individuals or shared among different
payers.
Preventive Services: Routine healthcare that includes screenings, check-ups, and patient
counseling to prevent illnesses, disease, or other health problems.
Primary Care: Health services that cover a range of prevention, wellness and treatment for common
illnesses. Primary care providers include doctors, nurses, nurse practitioners and physician assistants.
They often maintain long-term relationships with you and advise and treat you on a range of healthrelated issues. They may also coordinate your care with specialists.
Qualified Health Plan: Under the Affordable Care Act, starting in 2014, an insurance plan that is
certified by an Exchange, provides essential health benefits, follows established limits on cost- sharing
(like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A
qualified health plan will have a certification by each Exchange in which it is sold.
Qualifying Event: Any event or occurrence such as death, termination of employment, divorce or a
terminal illness that changes an employee's eligibility status and permits an acceleration or continuation of
benefits or coverage under a group health plan. The term is most frequently used in reference to COBRA
eligibility
Rate Review: A process that allows state insurance departments to review rate increases before
insurance companies can apply them to you. Under the Affordable Care Act, insurers that submit rate
increases of 10% or more are considered “unreasonable” and are subject to additional review.
Reinsurance: A reimbursement system that protects insurers from very high claims. It usually involves a
third party paying part of an insurance company’s claims once they pass a certain amount. Reinsurance
is a way to stabilize an insurance market and make coverage more available and affordable.
Rescission: The retroactive cancellation of a health insurance policy. Insurance companies will
sometimes retroactively cancel your entire policy if you made a mistake on your initial application when
you buy an individual market insurance policy. Under the Affordable Care Act, rescission is illegal except
in cases of fraud or intentional misrepresentation of material fact as prohibited by the terms of the plan
or coverage.
Rider (exclusionary rider): An amendment to an insurance policy. Some riders add coverage while
other riders exclude coverage (known as exclusionary rider). Example: You buy a maternity rider to
add coverage for pregnancy to your policy. An exclusionary rider is an amendment permitted in
individual policies that permanently excludes coverage for a health condition, body part or body
system (such as a certain disease state or disability). Beginning in September 2010, exclusionary
riders cannot be applied to coverage for children. Starting in 2014, no exclusionary riders will be
permitted in any health insurance.
Risk Adjustment: A statistical process that takes into account the underlying health status and
health spending of the enrollees in an insurance plan when looking at their healthcare outcomes or
healthcare costs.
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Self-Insured Plan: Type of plan usually present in larger companies where the employer itself collects
premiums from enrollees and takes on the responsibility of paying employees’ and dependents’ medical
claims. These employers can contract for insurance services such as enrollment, claims processing, and
provider networks with a third party administrator, or they can be self- administered.
Skilled Nursing Facility (SNF) Care: Skilled nursing care and rehabilitation services provided on a
continuous, daily basis, in a skilled nursing facility. Example: Physical therapy or intravenous injections
that can only be given by a registered nurse or doctor.
Special Enrollment Period: A time outside of the open enrollment period during which you and your
family have a right to sign up for job-based health coverage. Job-based plans must provide a special
enrollment period of 30 days following certain life events that involve a change in family status (such as
marriage or birth of a child) or loss of other job-based health coverage.
Special Healthcare Need: The healthcare and related needs of children who have chronic physical,
developmental, behavioral or emotional conditions. Such needs are of a type or amount beyond that
required by children generally.
State Continuation Coverage (“Mini-COBRA”): A state-based requirement similar to COBRA that
applies to group health insurance policies of employers with fewer than 20 employees. In some states,
state continuation coverage rules also apply to larger group insurance policies and add to COBRA
protections. Example: in some states, older workers (generally 55 or older) leaving a job-based plan may
be allowed to continue COBRA coverage until they reach the age of Medicare eligibility.
Third Party Administrator (TPA): An individual or firm hired by an employer to handle claims
processing, pay providers, and manage other functions related to the operation of health insurance. The
TPA is not the policyholder or the insurer. The TPA may often be a company you associate with health
insurance, such as Aetna or Blue Cross, but in this role they are not the actual insurer but are simply
managing the plan on behalf of the employer.
Uncompensated Care: Healthcare or services provided by hospitals or healthcare providers that do not
get reimbursed. Often uncompensated care arises when people do not have insurance and cannot afford
to pay the cost of care.
Usual, Customary, and Reasonable (UCR) Charges: A healthcare provider’s usual fee for a service
that does not exceed the customary fee in that geographic area and is reasonable based on the
circumstances. Instead of UCR charges, PPO plans often operate based on a negotiated (fixed)
schedule of fees that recognize charges for covered services up to a negotiated fixed dollar amount.
Conventional indemnity plans typically operate based on UCR charges.
Waiting Period (Job-based coverage): The time that must pass before coverage can become effective
for an employee or dependent, who is otherwise eligible for coverage under a job-based health plan. It
applies to all new employees and is not based on health status. This is different than a pre-existing
condition exclusion period, which is applied to individual employees and is based on health status.
Well-baby/Well-child Visits: Routine doctor visits for comprehensive preventive health services that
occur when a baby is young and annual visits until a child reaches age 21. Services include physical
exam and measurements, vision and hearing screening and oral health risk assessments.
Wellness Programs: A program intended to improve and promote health and fitness that’s usually
offered through the work place, although insurance plans can offer them directly to their enrollees. The
program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships,
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and other incentives to participate. Programs that tie financial incentives to achieving certain outcomes
(ie, set goals such as BMI, glucose levels or blood pressure) must meet certain federal rules. Examples
of some wellness programs: programs to help you stop smoking, diabetes management programs,
weight loss programs, and preventative health screenings.
Source: www.healthcare.gov/glossary/04262011a.pdf
The BLS National Compensation Surve
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